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Thailand Business News –

Pattaya is forced to expand their beaches to accomodate the increase in tourists With Asean Economic (AEC) forming in 2015, Pattaya officials are buckling down on foreign ownership in condominium projects from 70 per cent to 49 per cent. Deputy mayor, Ronakit Ekasingh said, “Pattaya needs to get ready for the AEC. If we wait until 2015, it may be too late as other countries in Asean are now preparing for the single regional common market.” As Pattaya is a special administrative area, Ekasingh’s hope is for Pattaya to lead the way in promoting investment in Thailand. Additionally to Pattaya being a tourist destination, Phuket is as well which is why a pilot programme should be instilled as both cities have their own administrative authorities

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Thailand Property – Pattaya reforms foreign ownership to get ready for AEC

Recognising that sales would slow, forward-thinking companies took the opportunity to focus on their fundamentals and improve their balance sheets. This was the strategy of Hubert Viriot, CEO of the luxury developer Raimon Land, who was appointed in the midst of the crisis.

The market is based on people who will actually live in the units and less on speculators.

But a stable political environment in Thailand would likely see interest rates rise by half a percentage point. And oil prices will float at about US$85 to $95 a barrel. Construction costs will rise when oil prices and interest rates are in an upward trend. Overall housing supply has dropped over the past two years with a decrease in the number of construction permits. Many small-sized developers went bust after failing to access loans from local financial institutions.

Thailand Business News –

House price boom in Asia now over Almost in all Asian housing markets in the survey, and performed more poorly in 2011, than during the previous year. House prices in Hong Kong were up 5.32% on the year, after rising 18.87% the previous year. House prices in Singapore rose a mere 0.28%, after a rise of 13.06% the previous year.

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House price boom now over in Almost all Asian housing markets

The SET index bottomed at 432 in December 2008 after tumbling from a high of 833 earlier that year. The index then levelled off in Q1/09, before working its way back to 560 in May. Triggered by positive pre-sale signs from developers, a reduction in construction costs and the government’s stimulus package, property stocks were among the first to bounce back. The SET’s revival reached a mark just 32% below its peak, in line with other world stock markets including the Dow Jones (-33%), Singapore Straits Times (-27%), the Hang Seng (-25%) and the FTSE (-27%).

The Bank of Thailand Monetary Policy Committee stopped cutting its key rate in May 2009 after seeing signals of a recovering economy. Many expect banks to adjust their rates down once rising confidence supports housing purchases, and promotion campaign launches to grasp home buyers.

As a result of declining consumer confidence during four consecutive quarters there has been a dramatic drop in sales of big ticket items such as vehicles (-33%). Bangkok housing registrations for single houses and townhouse units have also been hit hard, while investments and new mass transit lines have boosted market share for condominiums in the residential property sector, although the market demand as a whole has been lower. Transactions will most likely remain slow until confidence returns to both buyers and bankers, who finance property developers and their customers.

Many market observers and potential buyers were surprised that housing prices did not go down during the crisis — a reflection of the view that the market felt the situation was only temporary.

The market is based on people who will actually live in the units and less on speculators.

The mid to high-end segment boomed this year in Thailand as demand was wide and remained strong. The high-end will recover in the third or fourth quarter. But supply in this segment is very limited due to scarcity of land for new developments. Around 80% of the new launch in this segment was taken up. New supply in the high-end segment, now quoted at 150,000 to 200,000 baht a square metre, will be provided by developers with a strong financial status, experienced teams and products that match demand.
Currently, the MahaNakhon project is the only new high-end project in the pipeline. The Sukhothai Residence project on Sathorn Road, which is 70% sold, has frozen sales until demand can sustain the desired prices.

Thailand Business News –

Property firms in Bangkok are moving ahead with the development of new condominiums before the limitations of the new city plan come into effect on May 15, 2013. The new city plan states that high-rise construction with utilisation space of more than 10,000 square metres in a middle-density population area, in the central business districts will have to be located on a main road that is wider than 16 metres. In the current city plan, property firms can build high-rise residences with space utilisation of more than 10,000 square metres on a road only 10 metres wide. The new city plan would mean property firms can build high-rises on the main road only. They cannot build on land in a sub-road or in a soi.

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Thailand Condo – New city plan speeds up development of condominiums

The SET index bottomed at 432 in December 2008 after tumbling from a high of 833 earlier that year. The index then levelled off in Q1/09, before working its way back to 560 in May. Triggered by positive pre-sale signs from developers, a reduction in construction costs and the government’s stimulus package, property stocks were among the first to bounce back. The SET’s revival reached a mark just 32% below its peak, in line with other world stock markets including the Dow Jones (-33%), Singapore Straits Times (-27%), the Hang Seng (-25%) and the FTSE (-27%).

The Bank of Thailand Monetary Policy Committee stopped cutting its key rate in May 2009 after seeing signals of a recovering economy. Many expect banks to adjust their rates down once rising confidence supports housing purchases, and promotion campaign launches to grasp home buyers.

As a result of declining consumer confidence during four consecutive quarters there has been a dramatic drop in sales of big ticket items such as vehicles (-33%). Bangkok housing registrations for single houses and townhouse units have also been hit hard, while investments and new mass transit lines have boosted market share for condominiums in the residential property sector, although the market demand as a whole has been lower. Transactions will most likely remain slow until confidence returns to both buyers and bankers, who finance property developers and their customers.

The sector comes under the Property & Construction industry, as defined by the SET, the exchange’s fifth largest sector with a market cap of 351.

Second, Thailand’s banking system is much healthier than its Western counterparts. There are no toxic assets on local banks’ balance sheets. This benefits both the supply and demand side.

The tax breaks was initially introduced on March 2008, when the special business tax was reduced from 3% to 0.1%, and the transfer and mortgage fees cut from 2% and 1% respectively to 0.01%. These incentives were due to end on December 2, 2008, but have effectively been extended until the current May 30 deadline.

Thailand Business News –

Looking at real estate in Thailand, and specifically the issue of investment in real estate, it is useful to begin with valuation. Valuation is critical because we need to have an accurate gauge of the true value or worth of the property to make informed investment decisions.

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Real Estate as an Investment in Thailand
Thailand’s property sector is showing signs of an early recovery, as selective investors return to purchasing real estate stocks and actual property.

Some of the credit goes to a one-year government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01% and mortgage registration fees and provides a tax deduction on mortgage principal and interest.
Thailand’s property indicators show:

1.The Stock Exchange of Thailand (SET) index began rebounding in April 2009, and property stocks – while the first to fall in H2/08 – were amongst the first to recover
2. The Bank of Thailand (BoT) has lowered its policy interest rate four times since December 2008, prompting banks to reduce the minimum lending rate (MLR) from 7.25% to 6.25%
3. A continued drop in sales of durable goods due to uncertainty surrounding the economy is highlighted consumer confidence index (CCI) to a historic low of 72.8 in Q1/09 and New housing registrations in Bangkok and surrounding areas fell 43.8% in Q1/09

When the crisis ignited on Wall Street hit Thailand, our economic engine stalled early in 2009 and so did developers’ sales and revenues.

Second, Thailand’s banking system is much healthier than its Western counterparts. There are no toxic assets on local banks’ balance sheets. This benefits both the supply and demand side.

The severity of the global financial crisis also saw the government introduce additional sweeteners for buyers — a 300,000-baht income tax deduction for any buyers of a new home that was transferred within 2009. At the same time, mortgage interest that could be deducted from taxable earnings was increased to 100,000 baht from 50,000 and has now become a permanent tax benefit.

As Xi Jinping, China’s designated next leader, visits the United States, he faces protests over unfair competition and currency manipulation. More worrying than a trade war, however, is the potential for increased tension over technology transfers between China and the United States. | 中文 Continue Reading

British Land, one of the biggest property developers in the UK, has suffered a slight decline in the value of its retail assets.

British Land, which is the second-largest real estate investment trust by market value in the country, said the value of its portfolio of shopping centres and warehouses dropped 0.4 per cent in the final quarter of last year.

The drop was led by a 0.6 per cent fall in the property developer’s £2.7 billion retail warehouse portfolio.

British Land’s retail assets account for nearly 61 per cent of its total £10.28 billion property portfolio.

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Thailand Business News –

Qatars ambitious economic policies have sustained double-digit growth rates while much of the world has struggled over the past few years. But the gas-rich Gulf state may now be overreaching, as a building boom threatens a glut in its property market.

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Building boom in Qatar threatens property market
Thailand’s property sector is showing signs of an early recovery, as selective investors return to purchasing real estate stocks and actual property.

Some of the credit goes to a one-year government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01% and mortgage registration fees and provides a tax deduction on mortgage principal and interest.
Thailand’s property indicators show:

1.The Stock Exchange of Thailand (SET) index began rebounding in April 2009, and property stocks – while the first to fall in H2/08 – were amongst the first to recover
2. The Bank of Thailand (BoT) has lowered its policy interest rate four times since December 2008, prompting banks to reduce the minimum lending rate (MLR) from 7.25% to 6.25%
3. A continued drop in sales of durable goods due to uncertainty surrounding the economy is highlighted consumer confidence index (CCI) to a historic low of 72.8 in Q1/09 and New housing registrations in Bangkok and surrounding areas fell 43.8% in Q1/09

4 billion baht.

Several factors have contributed to the strong and rapid rebound.

Only large developers on the stock market remain on the Thai market, as they can access a source of funding. Prices of single detached houses and townhouses only rose moderately over the past year, with condominium prices increasing the most to more than 100,000 baht a square metre in Bangkok from 80,000 to 90,000 baht.

China’s economic imbalances are the result of urbanization and migration, not financial policy, and expanding residence rights for migrants would do more to boost consumption than fiddling with interest rates.

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